Economists propose to create a trust fund of russian assets

An independent trust fund that would consolidate all the frozen foreign exchange reserves of the Central Bank of russia and serve as a lending and borrowing mechanism for Ukraine's recovery.

This idea was proposed by two American economists.

Their proposal to create a trust to consolidate russian assets abroad, estimated at between $350 and $383 billion, is one of a number of ideas on where to find the money to rebuild Ukraine and how to make russia pay for it.

The idea was formulated by Michael Bernstam, a fellow at the Hoover Institution at Stanford University, and Stephen Rosefield, a professor of economics at the University of North Carolina at Chapel Hill.

Western governments are currently "considering one proposal after another on how to finance Ukraine with frozen russian assets," the scholars remind. The proposals include transferring these assets to Ukraine, using the proceeds of these assets to transfer them to Ukraine, or providing Kyiv with a loan from Western states, which would be repaid with the proceeds of russian assets.

"Governments can borrow as much as they are willing to commit to and can afford to repay with interest over time," the economists write, "If each of the Western countries borrowed and repaid an average of $2 billion to $4 billion a year...they could easily raise $50 billion to $100 billion a year for Ukraine's needs.

The trust fund could start by conducting an audit to account for all russian assets frozen in various jurisdictions.

In addition, the trust fund would avoid the debate over the pros and cons of seizing frozen russian assets: "It moves the assets into international fiduciary custody from their current suspended state, preserves them, and uses them to finance Ukraine."

Scholars also believe that in the event of a lawsuit by russia over the use of its frozen funds, Ukraine could voice its claims and provide evidence of financial losses and military destruction. In this case, a war crimes trial would continue, "which otherwise may never happen."

Source: The Hill